Palm caused a real stir at least among handheld aficionados with its mid-January pre-announcement of its long awaited Linux-based, next generation handheld. The real question, however, is whether this is too little, too late.

Initial reaction was generally hopeful. While this is not quite the first handheld to run a real operating system (the Vaio UX handheld comes with either XP or Vista) it is the first one that is priced to reach a mass market and that is being given publicity designed also to reach that market. This is a real advance on a technical level over the latest iPhone and arguably even Android.

But the pre-announcement left important technical questions unanswered. For instance, does the Pre run the full Java Virtual Machine? The answer to that will go far to determining how much functionality is really available to support advanced applications that do more than just fetch email or display Web pages.

Also, apparently the Pre does not support that huge library of third-party applications, ranging from hobbyist software to highly professional applications, for instance to support medical diagnosis, that hs grown up around the Palm handhelds. I think this is a mistake since it immediately pushes away advanced users who have been holding on to their favorite applications in the hope that eventually Palm or Access will field a Linux-based handheld they can migrate to. These people would line up for the Pre when it is released if it would run their apps. It is a niche market, but it is still large enough to be important. And a Pre that runs those apps could also win back at least some former Palm users who moved to WinMobile, a technology that is now pretty much mortibund. But perhaps some third-party software supplier will produce a Palm emulator that will solve that problem.

The bigger questions about the Pre, however, are not technical. Even if it is the marvel of the year, from a mass market standpoint it is probably too little, too late. Where once, years ago, Palm was the acknowledged handheld leader and innovator, it has long since sunk to the level of low-cost provider. The market momentum is all with Blackberry, which at this point owns the corporate marketplace, and Apple, which has an equal stranglehold on the consumer market. Palm, which has never had a play in the corporate world outside of a few professional verticals such as medicine in any case, is obviously focusing on the consumer market. But there Palm smashes directly into the Apple wall.

The basic fact about the consumer handheld gadget market today is the iPod. Basically iPod sales are only surpassed by sales of simple cell phones, with cameras probably third and smartphones still a niche market by comparison. And those iPods are being used. Half the population seems to be carrying some model iPod. And eventually those iPods do wear out, sending those people to the store to get a replacement. And for increasing numbers of those users that replacement is either an iPhone or an iPod Touch. As the price of solid state memory has plummeted in the last year, with no end in sight, the storage capability of the iPhone/Touch has grown to rival the classic iPod with its hard drive, at no increase in price. Eventually Apple will stop making those “classic” iPods entirely, and everyone who wants an iPod that can carry serious amounts of music will end up with a device that also can manage their personal calendar, tasks, etc., and get their email either over a cell network or WiFi. Many of those same people, meanwhile, are being handed Blackberries at work and being told these are the only devices supported by their IT department, so if they want to access their work calendar and email while they are away from their desk, this is what they will use.

So increasing numbers of people are and will be carrying two handheld devices that can manage their calendars, task lists, contacts lists, and email and get their cell phone calls. The question is, how many of those people will want to carry a third?

This is not to say that the Pre cannot find a market. Not everyone carries an iPod or a Blackberry, and if the Pre fulfills its promise as a more advanced handheld it may attract the market of people who want to do much more than just the basics. But those are niche markets, and Palm faces competition for them from Android, the remaining WinMobile devices, and at the high end the Vaio UX and possibly others. It is not a picture that portends mass adoption.

Action Item: User action: Basically, this is a wait and see situation at this point. Of course the device is not yet on the market, and basic questions about its capabilities have not yet been answered. Certainly it is advanced in its use of the Internet “cloud” both to store backups and access information seamlessly (at least if Palm's promises come true). That is a big plus, but how long will it be before other competitors catch up? Once the device is out, it might be worth looking at, particularly for consumers who do not carry an iPod and are not attracted to the iPhone, with its fancy front end but still disappointing lack of beyond-basic functionality. The Pre may be the next big thing, but it runs a big risk of becoming just another Edsel.